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Against that background, we are seeking to develop a practical and realistic dialogue with China. We work with China as permanent members of the United Nations Security Council. We encourage China to be forthcoming on such issues as non-proliferation--now being debated in New York--and regional conflicts. We want China to join international bodies such as the new World Trade Organisation, although obviously that must be on the right terms. We are building up contacts of all sorts with China through the British Council, the Great Britain-China Centre, the BBC and many other channels. At the heart of what we do with China is, of course, our special responsibility for the future of Hong Kong. As the House would wish, that responsibility is among our highest foreign policy objectives. We have the joint declaration and we must do what we believe to be in the best interests of Hong Kong on the basis of that declaration. We must not shrink from that. We owe the people of Hong Kong no less; I believe that we owe ourselves no less. That is not at odds with our wider objectives in relation to China. Some people speak as if we had a choice between China policy and Hong Kong policy. In fact, we cannot have one without the other. Only within the context of a wide-ranging relationship with China can we fulfil our responsibility for Hong Kong.When Vice-Premier Qian and I met in September last year, he spoke of a gradual restoration in Sino-British relations, over Hong Kong and more generally. As part of that, we want to increase the frequency and scope of visits in both directions. The visit that the Minister of State, my right hon. Friend the Member for Eddisbury (Mr. Goodlad), paid to Peking last July was one element in that. We welcomed to London the Chinese Vice- Minister of Finance. This year, two former British Prime Ministers, Baroness Thatcher and my right hon. Friend the Member for Old Bexley and Sidcup (Sir E. Heath), paid successful visits to Peking and they saw, as was right, a number of China's senior leaders. As I said, the next step is next month's visit to Peking by my right hon. Friend the President of the Board of Trade. I mentioned to Foreign Minister Qian that we could develop more contacts between hon. Members and legislators in China. Perhaps the clearest example of the depth of the relationship is on the commercial side. China's open-door policy has undoubtedly freed the entrepreneurial spirit and talent of Chinese people with spectacular results, as all recent visitors testify. Gross domestic product has trebled in the past decade and a half. British industry and commerce are heavily and successfully involved. Last year, we mounted our largest ever trade mission to China, with more than 100 representatives from more than 70 companies.
Last year, our exports to China were worth £845 million, up more than 14 per cent. on 1993, the figure for which was 72 per cent. up on the previous year. Britain is now the largest European Union investor in China. By the end of last year, our cumulative investment there amounted to $4.5 billion. More than 600 joint ventures in which British firms hold a stake exist in China. Those firms include some of the leading names in British industry.
To help our exporters, we have made use of the aid and trade provision, worth some £25 million a year, and in September last year we signed the third concessional financing agreement, worth £55 million. Therefore, our
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business men are doing well, but not yet well enough. We need to press for every advantage and opportunity for British industry in a market that, early in the next century, will be among the world's largest.We have well-established and expanding cultural links with China. Many such contacts exist. I should like just to mention that about 5, 000 Chinese students attend British universities and colleges--a striking figure. The British Council is active in promoting scholarships to Britain, English language teaching and a full exchange programme in science, medicine and technology.
Of course, there is not just progress and co-operation. Inevitably, there are disagreements, and the relationship must have the strength to allow those disagreements to be expressed. We need, for example, to talk candidly but calmly to the Chinese about human rights, and we do so. We continue to be deeply concerned at some of the reports that reach us. We raise those concerns regularly. I did so with Vice-Premier Qian in New York the other day, and the mission to China in 1992, led by my noble Friend Lord Howe, produced a number of particular practical recommendations for legal reform. We are continually in touch with the Chinese authorities about the taking up of those suggestions.
Right hon. and hon. Members are rightly much concerned about the threat to Tibetan culture and identity--a particular example of human rights abuse. That can be sorted out and put right only by a thorough dialogue without preconditions between the Chinese Government and the Tibetans. We urge all concerned to start that process without delay. I should say a word about Taiwan, which comes under this heading, because we have substantial commercial and cultural interests there. We do not recognise it as an independent state and that means that we have no political dialogue with it, but our unofficial links are there and making good progress.
Last year, our exports to Taiwan were worth £735 million, up 10 per cent. on 1993. Nine out of 10 Taiwanese manufacturing investments in Europe have come to the United Kingdom. We have 8,000 Taiwanese students at British universities and colleges.
We have a "One China" policy--which I am sure is right--so we have no political relationship with Taiwan, but we can develop our ties in other sectors. This year's first British festival in Taiwan, including a British education exhibition, is powerful evidence of that.
Mr. David Howell (Guildford): What my right hon. Friend says about Taiwan is welcome. As he says, we recognise the "One China" policy, but although 5,000 mainland students are here, we have even more Taiwanese students. Does he accept that in developing commercial relations with Taiwan, we should impose on the movements of people from Taiwan and on the visa procedures no more onerous a regime than any other country does?
Mr. Hurd: I shall look into the detail of that question, but we certainly have no desire to put any artificial or unnecessary restraints on people coming and going on their legitimate business between here and Taiwan.
I shall now say something about Hong Kong--
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Mr. D. N. Campbell-Savours (Workington): May I take the Foreign Secretary back to his reference to student movements to the United Kingdom from China? Is there not an argument that the British Government should take a far more hands-on approach to developing courses in United Kingdom universities in the Chinese languages, and also to promoting Chinese culture? Should we not at the same time promote an extensive programme of moving students from the United Kingdom to study in Chinese institutions? Is not this a critical point in our history, when we can formulate future events and the future relations between the two countries by developing that important area of student movement?Mr. Hurd: Yes, that is important. Each time that I have been to China, I have met British students studying there, as the hon. Gentleman suggests that they should. But I have also met many Chinese who have come back from studying in this country and are now taking up positions in different professions in the People's Republic, and I have been most encouraged by the way in which they look back on their time in colleges and universities here.
If I could come to Hong Kong, there are now just over two years to go before sovereignty over Hong Kong reverts from London to Peking. We have come a long way, and achieved a great deal, since the Sino-British joint declaration was signed in December 1984 and ratified by the House the following May.
On the political front, we have put in place, I believe successfully, arrangements for developing representative government in Hong Kong that are wholly compatible both with the joint declaration and with China's Basic Law for Hong Kong. It is a pity that, as the House knows, after 17 rounds of talks lasting most of 1993, it was not in the end possible to reach agreement with China on those arrangements.
Since then, elections have been held under the new arrangements for both tiers of local government in Hong Kong; for the district boards in September 1994, and last month for the municipal councils. Both elections saw a record number of candidates and a record turnout by the electorate. Pro-democracy parties finished with clear leads, but those regarded as having close links with Peking or with the business community also performed very respectably.
The final round of elections under British rule--those for the Legislative Council--will be held on 17 September this year. I am encouraged by the interest that all sections of the Hong Kong community are showing in contesting the elections, and I see no good reason why China should dismantle electoral arrangements that are wholly consistent with the joint declaration, the Basic Law and other understandings between us, and that so clearly command the confidence of most people in Hong Kong.
But that is not enough; that is not the whole story. The Hong Kong Government have had much more to do than simply to put those arrangements in place. As everybody now present in the Chamber knows, Hong Kong is an intensely dynamic and stimulating place--I think that it is the most stimulating place that I ever visit. It does not stand still, and its Government cannot stand still.
Over the past year, the Hong Kong Government have strengthened the protection of human rights there. In June they announced measures to promote sexual equality, and the United Nations convention on the rights of the child
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was extended to Hong Kong last year. The Hong Kong Government have also announced an administrative code on access to Government information, and next week they will introduce into LegCo a Bill to prohibit discrimination on grounds of disability. They have announced plans for legislation to protect privacy in respect of personal data, and to make legal aid more readily available in Bill of Rights cases.That big social and political legislative programme is against a background of extraordinary economic growth in Hong Kong--6.4 per cent. per annum over the past decade. I am not sure that, when people discuss Hong Kong here, they fully realise the size of what is being achieved. Gross domestic product per capita in Hong Kong is now greater than that in the United Kingdom or Australia. It is now the world's eighth largest trading economy, it has the world's sixth largest foreign exchange reserves and the seventh largest stock exchange and its container port is now the busiest in the world. In his 1993 and 1994 budgets, the Financial Secretary in Hong Kong was able once again to cut taxes, increase expenditure and put more money aside for Government reserves. Those reserves will be worth more than $HK150 billion--about £12 billion--when Hong Kong is returned to China on 30 June 1997. That is the latest estimate.
Several hon. Members rose --
Mr. Hurd: May I finish this paragraph? Sixty per cent. of the work force in Hong Kong do not pay any salaries tax at all and only 2 per cent have to pay the top rate, which I have to admit to the House is an onerous 15 per cent.
Sir David Steel (Tweeddale, Ettrick and Lauderdale): As the Secretary of State passed rather quickly over the human rights section of his speech, I apologise to him for not realising that he had moved on. Does he have any expectation that China will ratify the United Nations covenant on human and political rights before the handover in 1997? Otherwise, what does our guarantee to Hong Kong mean?
Mr. Hurd: I have no undertaking on that part. We continue to say that that would be right. In any case, we believe that China has an obligation to report under the Hong Kong obligations in the covenant. I am coming to the matters outstanding between us. The right hon. Gentleman is quite right: that point has not been cleared up and it is important.
Mr. Mike Gapes (Ilford, South): The Foreign Secretary has also failed to mention the plight of the widows and the ethnic minorities in Hong Kong. Are the Government proposing to take any action in the near future to try to resolve the difficulties of those groups?
Mr. Hurd: Those are two separate points, which were raised in the Select Committee report. I am coming to more detailed Hong Kong matters, but the hon. Gentleman will know that special arrangements have been made to look after the widows' position by my right hon. and learned Friend the Home Secretary. The Government have not been able to accept the Select Committee's recommendation on ethnic minorities. Hon. Members may want to raise that again, but we rest on the legislation that the House passed in 1990, on admissions from Hong Kong.
I was talking about the economic achievements of Hong Kong and I shall finish that point, if I may. The Hong Kong Government have been careful; they are prudent and we are
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constantly having to point that out to the Chinese authorities, which obviously fear extravagance. However, their fears are not borne out by the figures.The rate of increase in public spending in Hong Kong has kept pace and is closely in step with GDP growth: public expenditure amounts to less than 20 per cent. of GDP. But because of the amazing prosperity of the place, within that prudence, the Hong Kong Government have been able to increase spending on capital projects, on education and on health and welfare. The most striking symbol of that expenditure is, of course, the new international airport--the world's largest civil engineering project.
Such elements are all in place; they will continue. It is in our interests and that of China that the impetus of Hong Kong's economic success should continue undiminished. We are making a British commitment to that success after 1997 by building our
consulate-general there for that time, which will be our largest in the world.
At the top of the Government's agenda for Hong Kong is the relationship with the future sovereign power. I have mentioned the disagreement over constitutional development. That is now largely behind us. Indeed, there have been some significant steps forward in exchanges with China over Hong Kong recently. In June, for example, we reached agreement on something very difficult: the disposal and development of the military estate in Hong Kong. That agreement has released some $HK65 billion worth of property to the Hong Kong Government.
At last, in November last year, we broadly reached an agreement with China on the financing arrangements for the new airport--it is being built and it is being financed out of current revenue--but detailed arrangements are still not in place. In November, we also agreed to set up a new infrastructure co-ordinating committee, to promote necessary co-operation on infrastructure projects between Hong Kong and the neighbouring province of Guangdong.
It is true, as right hon. and hon. Members will point out, that there is still a great deal to be done and little time in which to do it. In important areas of the agenda for the transition, progress has been slow or non-existent. When I saw Vice-Premier Qian last week, I urged him to help to ensure that the work of the Joint Liaison Group--the group that tackles the agenda--was speeded up.
In the weeks and months ahead, a high priority in that work will be the rule of law in Hong Kong, because the legal underpinning on which civil society and the business community rests is crucial to its distinctive international identity and the concept of two systems in one country. That legal underpinning is fundamental to Hong Kong's attractions to foreign investors and its status as one of the world's leading business and financial centres.
A part of that, which is of great practical and symbolic significance, is Hong Kong's need for its own Court of Final Appeal to take over the role that is performed by the Judicial Committee of the Privy Council. We reached an agreement with China in 1991, and the Hong Kong Government have prepared a draft Bill for the Legislative Council, to implement that agreement to establish the Court of Final Appeal before the handover in 1997. We look to China to give its early support to the Bill, so that the court can be set up in good time and good order.
Dame Jill Knight (Birmingham, Edgbaston): Having visited Hong Kong not too long ago and spent some time with the chief of the Hong Kong police, I was concerned
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to hear of their feelings about the problem of corruption, which has been dealt with effectively in Hong Kong through the Independent Commission Against Corruption, but is endemic in China. That is a very real worry. Can my right hon. Friend tell the House anything about that worry or say anything to assuage it?Mr. Hurd: I was about to say that the rule of law is one of the essential qualities in Hong Kong. Another is the professional and objective way in which the public services--the civil service and the police--carry out their duties. They have their problems in Hong Kong, but my hon. Friend is perfectly right. I think that they have overcome them and it is extremely important for the future of Hong Kong that that professionalism, which includes the issue that my hon. Friend mentioned, should be sustained and that China, as the new sovereign power, and the new autonomous Government in Hong Kong should do everything to protect that. It will involve some sensitive handling of the next 800 days by the Chinese Government and Chinese officials and Ministers, especially in the way that they handle the police, their prospects and the civil service in Hong Kong. I made that point to the Chinese Foreign Minister and it is one of the most important points that needs to be made.
Mr. Tim Renton (Mid-Sussex): On the Court of Final Appeal, Ambassador Ma, the Chinese ambassador to the United Kingdom, was in the House yesterday evening to address the all-party Hong Kong parliamentary group, of which I am the chairman. At the meeting, he made it clear that China did not want the Bill setting up that court to be introduced at the Legislative Council without China's blessing--he did not want it to be introduced unilaterally. I understand that China has been considering the detail of the Bill for about 11 months and, as my right hon. Friend says, time is beginning to run out. Does he see any way out of the dilemma? Clearly, the introduction of the Bill and the setting up of the Court of Final Appeal is a matter of substantial importance to the people of Hong Kong.
Mr. Hurd: That is of substantial importance, and my right hon. Friend is right. There is a way of reconciling what the Chinese ambassador said with the requirements of the Government and people of Hong Kong. The answer is that we should reach agreement with the Chinese. We do not need a new framework agreement; we have got that agreement. Agreement has already been reached, for example, on the role of foreign judges. There is no disagreement between us and China--it was all agreed in 1991. We now need the agreement of China to the actual draft legislation, which the Chinese have and are considering. Expert talks are planned for the next few days-- the date does not come immediately to mind, but those talks are imminent. As I explained to the Foreign Minister, time is pressing. The Chinese know that. They know that we want to see the Court of Final Appeal in good working order well before the transfer of sovereignty. They know the timetable backwards from that to the passage of the necessary legislation by LegCo. There is time to answer any remaining questions from the Chinese and time to reach agreement. That is what we seek. I hope that they seek it, too.
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We need also greater certainty on the adaptation of Hong Kong's 600 Ordinances and 1,000 pieces of subsidiary legislation to make them compatible with the Basic Law. A great deal of that will involve technical, professional work, without main political content, but it must be done. We need to speed up the slow business of localising to Hong Kong legislation previously extended to the territory by Order in Council. A raft of multilateral and bilateral international agreements underpin the status of Hong Kong as a first-world economy and society. Those agreements need to be extended, transformed and applied to the new special administrative region.Mrs. Gwyneth Dunwoody (Crewe and Nantwich): I should like the Foreign Secretary to pay particular attention to public health implications, because there have always been enormous differences between the public health rules in Hong Kong and those in the People's Republic. Those differences pose a problem for any doctors in Hong Kong, who frequently find themselves attacked, not on the basis of the adequacy of their medicine, but on the basis of their perceived status as people trained under a previous colonial administration.
Mr. Hurd: I shall certainly consider that. We have had, for example, a discussion with the Chinese about sewage pollution in the harbour, which bears on the hon. Lady's request. The Hong Kong Government felt that they had to get on with stage 1 of their scheme to deal with that pollution. The Chinese had some questions and doubts about that, which, I hope, have now been resolved. Certainly, the Government are going ahead with that work. That work illustrates the importance of maintaining the standards of all kinds to which Hong Kong is accustomed, while co-operating with China in the transition.
In answer to the question from my hon. Friend the Member for Birmingham, Edgbaston (Dame J. Knight) about the police, I have already referred to the crucial matter of confidence in the public services in Hong Kong. That confidence in the reputation of Hong Kong for clean and efficient administration is crucial for the future prosperity and stability of the territory. One of our most important tasks in the next two years is to work with China--it must be with China--for a smooth transition in the civil service.
My right hon. Friend the Member for Guildford asked me about one aspect of immigration and nationality arrangements. We have plenty of work to do. We need to clarify with China the provisions for right of abode in Hong Kong after 1997; and to establish arrangements for eligibility for and the issue of the new passport for the permanent residents of the new special administrative region, which is what Hong Kong would be. I discussed that with the Chinese Foreign Minister. We need to continue to discuss in the joint liaison group the matter of visa-free travel for holders of Hong Kong special administrative region passports and holders of British national (overseas) passports. We and the Governor want to do that in co-operation with China.
In October, in his address to LegCo, the Governor set out a series of proposals for co-operation. He promised, for example, full co-operation with the preparatory committee that China will establish early next year to start work on the transfer of sovereignty. He pledged that he
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and his administration would give the chief executive designate of the special administrative region every help in preparing to take over.Dr. John Marek (Wrexham): The Foreign Secretary is aware of my general support for his policies and those of LegCo and the Governor. Will he say a little more about the possible statelessness of Crown servants in Hong Kong? It is possible that certain servants of the Crown, for example, military personnel, the police and civil servants, will be stateless. The British House of Commons and the Government have a duty to ensure that none of those people find themselves in such a position after the takeover. Will the right hon. Gentleman perhaps give an assurance to those people that we shall do our duty and ensure that they do not fall into any such position after 1997?
Mr. Hurd: I do not understand that those people would be stateless. The issue is more about access to this country and so on. However, rather than answer in detail off the cuff, I shall ask the Minister of State to elaborate on that in his reply.
I repeat: the British Government and the Hong Kong Government want to and need to co-operate with China to ensure the smoothest possible transition for Hong Kong and the fulfilment by both sides of what we undertook under the joint declaration. There has been some improvement in that co- operation, but if the transition is to be as smooth as possible, and as smooth as Hong Kong needs, we shall need to work even more closely together. There is a shared interest in doing so.
Of course, Hong Kong will continue to matter greatly to Britain, even after the total transfer of sovereignty, but China has a huge and growing stake there, too. Hong Kong's economy now corresponds to 26 per cent. of the gross domestic product of China, up from 18 per cent. in 1992--an astonishing figure, given that China has been growing fast and Hong Kong is very small. Hong Kong is hugely important to China--more so than it was even three years ago. We therefore have a shared interest in successful co- operation. That will require political will on both sides.
As the 800 days tick by, it is right that, increasingly, people in Hong Kong and outside Hong Kong will look to China, the new sovereign power, for reassurance about the future of Hong Kong. I believe that the Chinese leaders, past and future, understand increasingly the scale and complexity of the responsibilities that they will take over on 1 July 1997. We want to turn that understanding into practical, concrete steps, which the community in Hong Kong is seeking. I have spent most of my time discussing Hong Kong, but that is right, because it is--although not the only element--the central element in the relationship between Britain and China. I hope that I have shown that the interests that our two countries have in common, in respect of Hong Kong and in respect of the other links between us, go far beyond the differences that have from time to time divided us. Together, we --that is, Britain, China and Hong Kong--need to build a stronger and deeper partnership for the 800 days until the transfer of sovereignty, and indeed thereafter.
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4.37 pmMr. Robin Cook (Livingston): On behalf of the Opposition, I welcome the opportunity for a debate about China and Hong Kong. I echo the observation of the Foreign Secretary that China is a major power, and will become an increasingly large power. It has always had one of the largest populations. It now has one of the fastest-growing economies, which is on course to become one of the largest economies, of the world. For that reason, I share the Foreign Secretary's opinion that it is important that China should take its place in the World Trade Organisation. In view of its role in world trade, it would be quite wrong if China were not a member. That role, as China's economy grows, will also develop into a stronger political role. I noted that the Foreign Secretary met his opposite number in China most recently in New York this month, at the review conference on the non-proliferation treaty. He must be aware that China has taken a lead in the discussions at that review conference and has staked out a clear position that agreement to indefinite extension must be achieved by consensus, not by majority vote. That position has evoked considerable support from the non-nuclear states present in New York, and illustrates the way in which China will increasingly have a power to influence the outcome of international negotiations and to shape the debate in international forums. It is therefore right that the House should consider our relationship with that power.
The Foreign Secretary said that we do not need to choose between having a foreign policy on China or having a foreign policy on Hong Kong. I have some sympathy with the point that we do not have to choose between the two, but we shall not get our relationship with China right if we do not get our policy on Hong Kong right. I want to consider why this debate is important. It touches on the future of that territory, which is now by far the largest overseas direct interest of the British Administration. We do not approach the debate in a party political spirit. I hope that I do not disappoint the House when I say that I do not intend to make this a partisan occasion. It is a subject that we should try to pursue with the least party political disagreement between us, and with the fullest unity on a national basis. It is important that we do so on two counts. First, there are important human consequences of any decision in relation to the people of Hong Kong, of whom there are a large number, that we take in the Chamber or that the Government take. There are 6 million residents of Hong Kong, of whom just over 3 million hold British nationality of one form or another. We are dealing with a population that, in terms of total residents, is larger than Scotland and, in terms of British nationality, is larger than Wales. That is the human significance of the issues that we are discussing. We enjoy with those people close economic ties, cultural ties, which we can see in our cities, and historic ties. In the week when we celebrate the 50th anniversary of victory in Europe, it is appropriate to remember that many of those in Hong Kong served in that war. There will be some disappointment in Hong Kong that, in the debate on Hong Kong during the week of remembrance, the Foreign Secretary was not able to respond to an intervention from my hon. Friend the
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Member for Ilford, South (Mr. Gapes) by offering British nationality to the war widows currently in Hong Kong. They constitute a small number and I do not accept that it would set an immense precedent to give them exceptional treatment, and I am sure that such a move would be welcomed on both sides of the House.The second reason why it is of grave importance that we debate the subject and do so in a non-partisan spirit is that this is a time of anxiety in Hong Kong. The Foreign Secretary repeatedly stressed the importance of confidence in the future of Hong Kong. I agree that it is important, but we would fail the people of Hong Kong if we did not reflect in the debate the considerable unease in some quarters. I have not seen the figures--I do not believe that the Government have published them--but I understand that the Government's survey of the civil service in Hong Kong has discovered that one third of senior civil servants wish to leave the service before the point of transition. Part of the reason for the anxiety is the continued demand by the Government of China for access to security files held by the Hong Kong Government--a demand repeated in the February session of the preliminary working committee of the Government of China. There appears to be similar unease within the police force. The senior police officer, who was appointed to head the special unit to ensure that the top 3,000 officers remained after 1997, took early retirement last month saying that he did not wish to continue in service after the transition to Chinese rule.
The root of those anxieties is well understood by both sides of the House. It goes back to the distressing events five years ago in Tiananmen square and its surrounding streets. Images on television are powerful. It is perhaps paradoxical that those powerful images also have a capacity to ebb in the memory. It is appropriate to remind ourselves that the human consequences in China of the events in that period remain. Many people who were arrested in that month in 1989 are still in prison and are likely still to be in prison on 1 July 1997 at the point of the transfer of sovereignty of Hong Kong. Some hon. Members will have seen the detailed report of Amnesty International on those who were arrested in that period and who are still held, despite being classified by Amnesty International as prisoners of conscience. I shall refer only to one of the many--Chen Lantao, who was charged with counter-revolutionary propaganda and disturbing traffic. Those charges related to the fact that he attended peaceful demonstrations, made one speech and was accused of listening to the Voice of America radio station. For that behaviour, he was sentenced to 18 years in prison. I hope that both sides of the House would say that that is an unacceptable infringement of the right to freedom of speech and does not represent acceptable governance or acceptable standards of political and civil freedom. Those who took part in the Tiananmen square demonstrations were Chinese nationals. There are other concerns involving the treatment of other ethnic groups--most obviously, the continued denial of autonomy and political rights to the population of Tibet. It is important to stress in such a debate that my hon. Friends and I believe that the protection and promotion of human rights must be one of the consistent objectives of foreign policy.
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Those of us who have met representatives of the Chinese Government are familiar with the argument that western concepts of human rights are not appropriate in the different cultures of the orient and in the very different social and economic conditions of China. I agree that it would be wrong to seek to impose the precise legal forms that we have evolved over centuries. That would be a new form of cultural imperialism. But the world has developed universal standards of human rights; they are embodied in the United Nations declaration of human rights. Every member of the United Nations is entitled to demand those universal standards of every other member of the United Nations. Nothing would go further to boost the confidence to which the Foreign Secretary referred than for China to accede to the international covenant on civil and political rights developed through the United Nations.The events of Tiananmen square had a profound effect on the views of people resident in Hong Kong, and appear to have had a profound effect on the rulers of China as well. One of the issues with which we must now grapple is that those events appear to have left the rulers of China perhaps more hostile to democratic reform and more nervous about the impact on the rest of China of the political processes in Hong Kong. That may have been a factor in the slow progress in recent negotiations. There is a paradox in the fact that the events of five years ago have made progress towards democratic rights in Hong Kong more pressing, but have also made it more difficult to obtain the agreement of the Government of China. We would fail if we had such a debate without acknowledging that each side must share the weight of its historic legacy and historic failures. Britain has been responsible for the government of Hong Kong for 150 years. We would be in a much stronger position in negotiating on the future of Hong Kong under China if we had not discovered democracy so strongly in the past five of those 150 years or if the present Government had made more rapid progress in the first five years after the joint declaration in 1984. As it is, we are in the slightly difficult position of saying that the lack of democracy that we have tolerated for 145 years will become intolerable two years from now when China takes over.
I welcome the fact that the Governor is currently carrying out a review of legislation to identify those provisions which limit press freedom. I understand that he has identified 41 provisions and that 28 of them have been dealt with, or are about to be dealt with in forthcoming legislation. That is good, and he will have the support of both sides of the House in that exercise. It must be a matter of regret that 41 provisions limiting press freedom have been left for reform if not at the last minute, then at the eleventh hour of British responsibility for Hong Kong. The Foreign Secretary said that we debate issues about Hong Kong in this place from time to time. Before coming to the Chamber, I checked in the Library when we last debated the subject and I discovered that this is the first debate about Hong Kong in this Parliament.
It is certainly the first such debate since the Government appointed a former member of the Government as Governor of Hong Kong. That was a bold appointment on which we have not previously had the opportunity to congratulate the Government. It was a deliberate choice, which I presume reflected a studied intention on the part of the Foreign Office to make the role of the Governor more politicised.
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Last year, the Select Committee produced an excellent report about Hong Kong, in which it observed:"There can be no denying that the British approach did change and that the new Governor's line was more robust."
I think that the Select Committee was then slightly startled to discover that the last three former ambassadors to Peking disagreed with the new Governor's line.
Some hon. Members may have read--as I am sure the Committee Chairman has-- the paper by Sir Percy Cradock which appeared last year in World Today . Whatever view one takes about the substance of his argument, as a practising politician it is impossible not to admire the sustained invective with which he argues it. Any of us would be proud to use such rhetoric about our opponents. It demonstrates unusually strong feelings on the part of a former diplomat about a current Governor.
I shall approach the record of the present Governor of Hong Kong in a more consensual spirit. He has our full backing in trying to achieve an open and democratic process for the people of Hong Kong within the terms of the joint declaration and the Basic Law. There will always be room for legitimate debate about the details. I confess that I am rather perplexed by the detail of the functional constituencies that have been created. Functional constituency No. 9 covers the services and it extends a franchise to everyone employed in the civil service, the public service, education and health, and those who work in private entertainment and leisure services, electrical appliance repairers, cobblers and barbers. I think that it would be challenging for any hon. Member to claim to represent consensually such a constituency.
Mr. Hurd: I do not think that the hon. Gentleman would get the barbers' vote.
Mr. Cook: The Foreign Secretary is probably correct; that is a fair observation.
There would also appear to be practical problems, as I understand that registration is not proceeding particularly easily in such difficult constituencies. Therefore, I can understand why some in the Chinese Government regard that cumbersome mechanism as merely a device for getting around the limits in the Basic Law about the number of people who may be elected directly from geographic constituencies.
Whatever argument there may be about the details, there is no division between us about the direction of reforms. There must be no doubt about the united resolve of all political parties in Britain that Hong Kong should fulfil the terms of the joint declaration, in that it should enjoy a high degree of autonomy, its legislature should be constituted by election and the rights and freedoms of the Hong Kong people should be protected by law.
The objectives of the joint declaration provide a framework for the constitution of Hong Kong not merely to 1 July 1997 but for the 50 years beyond that. There are now fewer than 800 days until the transition of sovereignty. In those remaining 800 days, the test of whether we are successful in the administration that we provide during that period and the test of Governor Patten's achievement is not how much we can do, but how much will remain in place permanently beyond that time.
The Governor will leave Hong Kong on 1 July 1997, but the population of Hong Kong will stay--the people have nowhere else to go. If this debate is to address the concerns, welfare and rights of the Hong Kong people,
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we must look not only at the structures that we are building but at how stable they will be after we have left. I said earlier that this is the first time that we have debated the subject in the present Parliament. As we review the last three years and Governor Patten's period in office, I think that it should concern the House that during that time, we have made the least progress towards agreement with China about the future of Hong Kong after 1997.Earlier this month, the joint liaison group met for the 32nd time. The communique issued at the end of the meeting was depressing. It admitted that there had been no progress on the issue of the Court of Final Appeal, no progress in the dispute over container terminal 9, and no progress on the right of abode. As time runs out, the pace of progress in Hong Kong appears to be slowing down rather than speeding up.
The people in Hong Kong who are watching the proceedings live may be rather disappointed that, having chosen to initiate the debate, the Government have no new initiative to offer as to how we will move out of deadlock. There are three major strategic concerns in the current deadlock. The first relates to democratic reforms. Those who heard the speech of the Chinese ambassador last night heard him repeat his Government's determination to dismantle the district boards, municipal councils and the Legislative Council, which proceeded to election without the agreement of the Chinese Government. It is not recognised by China, which has stated repeatedly that it will not continue beyond 1 July 1997. On the present basis, there will be no through train, as was hoped. Some people argue that China will suspend those bodies on 1 July 1997, replace them with an appointed provisional body and subsequently relaunch them as elected bodies, having saved face and put itself in a position where it can claim that it and not the previous Government decided to set them up. I am concerned that that may be only a comforting theory. Even if that is the Chinese Government's intention, once the bodies have been suspended and replaced by appointed bodies, there will be a strong temptation not to return to the elected bodies.
The Foreign Secretary seemed to share the anxiety about how our present conduct will bear upon what happens in Hong Kong after 1997. In addressing the House in February 1990, he said:
"Those who suggest that whatever we do now China would be obliged to accept in 1997 are out of touch with reality".--[ Official Report , 16 February 1990; Vol. 167, c. 580 .]
I hope that, five years later, that belief does not provide a basis for policy. We would fail the purpose of the debate if we did not press upon the Government the importance that any changes must be permanently bedded. If it is to be confident about its future, Hong Kong not only needs continuity after July 1997; it needs to be able to see soon that there will be continuity after that time. A second strategic concern is the lack of progress in the past three years on the businesslike, but essential, agenda of renewing treaties and contracts. On that point also, the communique from the Joint Liaison Group was depressing. The communique s normally state that agreement has been reached on a number of multilateral agreements. However, in this case only one agreement had been reached, concerning trade with New Zealand. I believe that some 200 such agreements are still to be renewed. It is difficult to see how that can occur by
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1 July 1997. Even if political agreement is provided at the last minute, it will not be possible to achieve the necessary technical work.The third issue to which the Foreign Secretary referred was the Court of Final Appeal. The joint declaration is absolutely clear on that point: final adjudication must remain within Hong Kong and there should be no further appeal to a legal body outside that country. No one issue is more important to resolve. It is not a marginal issue; it is crucial to Hong Kong's ability to prosper as a business based on the rule of law. Nothing would do more to undermine confidence than to suggest that final adjudication would not stay in Hong Kong or, for that matter, that the judges in the Court of Final Appeal would not be independent of political interference. Anxiety about that must be reinforced by the dispute over the container terminal, where the Government of China have blocked the appointment of Jardine Matheson as the contractor for reasons that do not relate to the nature of the tender or contract.
If Hong Kong is to continue to thrive as an enterprise economy, it must be on the basis that contracts are awarded because they are won by people who can comply with the contract, not arbitrarily on the basis of political judgment about the business concerned. I hope that, in the next two years, it will be possible for the Government of China to recognise the importance of that principle, because it is in China's interest that Hong Kong should survive and thrive as a business community. Hong Kong provides a quarter of China's gross domestic product. It is the gateway between China and the global economy. It is the source and route of much of the inward investment for China. The future of the Chinese economy is, in part, based on the continuing success of Hong Kong.
The same consideration that makes Hong Kong of such economic importance to China also makes Hong Kong important to Britain. Throughout my speech, I have dealt with the interests of the people of Hong Kong, and that must be our first concern. It is a sufficient concern on its own, but we also have an incentive to ensure the smooth transition and stable future for Hong Kong on the basis of the interests of Britain and the British economy. Hong Kong provides us with immediate access to south China. As the Foreign Secretary said, growth in that area is phenomenal. It is the fastest- growing economy in the world. It has high-quality investment and high value -added products, and it has a rapidly expanding market, which has grown 400 per cent. in the 10 years since the joint declaration.
We must acknowledge the dramatic success of that economic strategy, and acknowledge that the Chinese road to capitalism has proved much more successful than the route pioneered by the International Monetary Fund and the World bank in central and eastern Europe. China is now a major economic power on the Pacific rim, where there are a growing number of similarly fast-developing economies. By the second decade of the 21st century, six of the 10 largest economies in the world will be around the Pacific, not the Atlantic. That will make our ties with Hong Kong of increasing importance to us. It is vital that we maintain our continuing relationship and use that direct access to the region of the world with the fastest-growing economy.
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Those ties must not end on 1 July 1997. Their economic importance will become even greater for Britain as the economy of that region grows, and their diplomatic value will be of greatest significance to the residents of Hong Kong as their strongest link with the world outside China. Let us use the next 800 days to ensure that our economic and historical ties with Hong Kong continue beyond 1 July 1997 and that they are ties with a Hong Kong that retains a society that is both democratic and respectful of human rights, and that is operating in an economy that is both enterprising and prosperous. 5.3 pmSir Edward Heath (Old Bexley and Sidcup): As I was able to spend a fortnight over Easter in the far east--China, Vietnam and Hong Kong--I am glad of this opportunity to intervene for a few minutes on this important matter.
I thank the Foreign Secretary for the quiet and conciliatory way in which he opened the debate. Some people in the far east are worried about this debate today because of some of the things that might have been said, which were almost said by the hon. Member for Livingston (Mr. Cook). It is important that we consider matters realistically and in perspective.
What impressed me most in visiting those countries was their emphasis on being Asia. Hitherto, one has known them as individual countries, and they have usually discussed with us some form of help or aid. That was no longer the case. They said that they were all Asian and knew that a large part of the world wanted to invest in them and trade with them, and that that was what they were building up.
I found it rather disconcerting when I went to see the pandas research area out in the wild. I said to the director, "I am sorry that you don't export pandas any more. Chairman Mao gave me two, but you broke the rule and again sent some to London zoo, which have now died. Now I'd like some more. Break the rule again." They said that the rule had gone, so I said, "Well, that's excellent, then. I can have two pandas." "Yes", they said, "You can have them for a year, five years or 10 years. You just sign a document to say how long you want to keep them for."
I said that that was excellent, and they said, "Yes, it will cost you $1 million a year." I said, "What? $1 million a year?" They said, "Yes, sign the document for 10 years and you put down $10 million." I argued that Chairman Mao gave me pandas, and that he would be looking down from above in horror at that proposal. "Ah, well," they said, "things have changed since that time. We now have a market economy." Vietnam, too, is now well on the road to a market economy. Ministers there explained how they were doing that, and said that what they most wanted to establish was an infrastructure. They told me that they get on perfectly well with Britain and such business men from Britain who went there, but were sad that we were so far behind all the others. That is true. One of the reasons is that we dragged along behind the Americans, while others went in as soon as the opportunity occurred. They have now established themselves well and, once again, we must catch up.
I now come to the main topic of discussion, which is China and Hong Kong. The position of China today has been emphasised both by the Foreign Secretary and the
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hon. Member for Livingston. To my regret, I do not believe for a moment that Asia as such, or even China in its present position, is fully understood or recognised by the people of this country, even by business men.I am glad that the Secretary of State for Trade and Industry will go to China shortly, and take 125 business men. Prime Minister Li Peng assured me that he would receive him and discuss those matters with him, which is exceptional. There will be an opportunity for business men, but it requires action on their part. They should not treat it just as a nice visit to see what the place is like, and I hope that they will follow it up.
In addition to the other figures that have been given, China today has $52 billion in reserves, which is quite exceptional. Its purchasing power as a country is third in the world. One may say that that must be divided between 1.25 billion people but, from the point of view of making purchases outside China, it is an enormous sum, and it will grow, as the Foreign Secretary emphasised.
That is the realistic position against which we must put Hong Kong. To my great regret, mistakes have been made over Hong Kong. One of the things that I agreed with Chairman Mao Tse-Tung in 1974 was that there would be a smooth handover of Hong Kong to China. He said to Chou En-Lai, "Neither you nor I will be here to see that, but Heath and Wing Lun Weng will be." He has died, so I am the sole remaining factor in that agreement.
I find that the great majority of people in Hong Kong with any responsibilities, particularly business men, now want to get on with the changeover. They do not want another row or explosion, and that is the danger as regards the appeal court. It could lead to another explosion, and we must recognise that the Chinese will be responsible for Hong Kong in 800 days. They know the power they have, and what they want to bring about. We are foolish if we ignore that, because that is the situation that now holds sway in Hong Kong, certainly among those whom I have mentioned.
I discussed the matter of the appeal court widely while I was there. The British Government and Hong Kong and the Chinese Government came to an agreement in 1991. It was, in fact, a rather remarkable agreement. It was agreed that the supreme appeal court would consist of five judges, only the chief justice would be Chinese, and the others could be any nationality. Four would be permanent, one would be brought in to deal with particular matters and they could come from outside Hong Kong--they could be from Australia, New Zealand or Britain. However, the fact that China accepted that in an agreement was in itself remarkable. That still holds. The Chinese are perfectly prepared to continue.
Both sides having agreed that, it was put to the Legislative Council, which chucked it out. Why did we find it necessary to put the matter to an advisory body or accept what happened? However, we did. Three years then passed before we reached the next stage, which was to have a draft and put it to Beijing. Beijing says that it has had it for five months, but it is we who are complaining. We kept it for three years, and, what is more, the Governor has now set a time limit. He says that the answer has to be back by July, or he will go ahead with what he wants to do.
I am afraid that the response from Beijing is that it will not be dictated to by Hong Kong. There is room for an approach. In fact, an approach must be made. We cannot have an explosion about this. As I suggested, the approach
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